GETTING TO THE HYDROGEN ECONOMY
Chapter 5. Building the Solar/Hydrogen Economy
Lester R. Brown, Eco-Economy: Building an Economy for the Earth
(W.W. Norton & Co., NY: 2001).
The transition from fossil fuels to a solar/hydrogen
energy economy can be seen in the widely differing growth rates
among the various sources of energy. (See Table 5-2.) During the
1990s, wind power grew by a phenomenal 25 percent annually, expanding
from 1,930 megawatts in 1990 to 18,449 megawatts in 2000. Sales
of solar cells, meanwhile, grew at 20 percent a year, while geothermal
energy grew by 4 percent annually. Hydropower, the fourth renewable
energy source, grew at 2 percent a year.
Among the fossil fuels, natural gas grew the fastest, at 2 percent
annually, followed by oil at 1 percent. Coal use declined by 1 percent
a year, with the actual decline coming after 1996. Nuclear power
continued to grow, but just barely, averaging less than 1 percent
a year during the decade.
The contrasting growth rates among the various energy sources were
even greater in the year 2000 than during the 1990s. World wind
generating capacity grew by 32 percent and sales of solar cells
by 43 percent. The burning of coal, the fossil fuel that launched
the industrial era, declined by 4 percent in 2000; natural gas increased
by 2 percent; and oil increased by 1 percent. Nuclear power expanded
by less than 1 percent. These data for the latest yearwith
the dramatic gains in wind and solar combined with the sharp decline
for coalindicate
that the restructuring of the energy economy is gaining momentum.58
Coal is the first fossil fuel to peak and begin to decline. After
reaching a historic high in 1996, production dropped 7 percent by
2000 and is expected to continue declining as the shift to natural
gas and renewables gains momentum. Coal consumption is declining
sharply in both the United Kingdom, the country where the Industrial
Revolution began, and in China, the world's largest user.59
The shift in the fortunes of nuclear power could hardly be more
dramatic. In the 1980s, world nuclear generating capacity expanded
by 140 percent; during the 1990s, it expanded by 6 percent. Confronted
with decommissioning costs of power plants that could rival the
original construction costs, the energy source that was to be "too
cheap to meter" is now too costly to use. Wherever electricity markets
are opened to competition, nuclear power is in trouble. With a number
of older plants scheduled to close, its worldwide use is likely
to peak and start declining in a matter of years.60
Nuclear power plant closings are now under way or slated in the
years immediately ahead in many countries, including Bulgaria, Germany,
Kazakhstan, the Netherlands, Russia, the Slovak Republic, Sweden,
and the United States. In three countries once solidly committed
to this energy source-France,
China, and Japannuclear
power is losing its appeal. France has extended its moratorium on
new plants. China has said it will not approve any additional plants
for the next three years. Japan's once ambitious program is in trouble.
A serious accident in September 1999 at a nuclear fuel fabrication
plant north of Tokyo has reinforced rising public concerns about
nuclear safety in Japan.61
Meanwhile, the use of wind and solar cells is growing by leaps and
bounds. The spectacular growth in wind-generated electricity is
driven by its falling cost. With the new advanced-design wind turbines,
electricity is being generated at less than 4� per kilowatt-hour
in prime wind sitesdown
from 18� a decade ago. Surpluses of wind-generated electricity on
long-term contracts can guarantee the price, something those relying
on oil or natural gas cannot do. With annual additions of wind capacity
during the late 1990s exceeding those of nuclear power, the torch
is passing to a new generation of energy technologies.62
In contrast to the old energy economy, in which a handful of countries
control the supply, the new energy sources are widely dispersed.
The economic opportunity for developing countries to develop their
indigenous energy sources promises a strong boost to their overall
development. New coalitions are evolving in support of the new energy
sources, such as the one between U.S. environmental and agricultural
groups in support of wind power development.
Satisfying the local demand for electricity from wind is not the
end of the story. As noted earlier, cheap electricity produced from
wind can be used to electrolyze water, producing hydrogen. At night,
when electricity demand falls, electricity from wind farms can be
used to power hydrogen generators to produce fuel for automobiles,
trucks, and tractors.
With the first automobiles powered by fuel cell engines expected
on the market in 2003 and with hydrogen as the fuel of choice for
these new engines, a huge new market is opening up. As noted earlier,
Royal Dutch Shell is already opening hydrogen stations in Europe.
William Ford, the youthful chairman of the Ford Motor Company board,
has said he expects to preside over the demise of the internal combustion
engine.63
The economic benefits of developing local low-cost renewable sources
of energy are obvious. In a community, for example, that gets its
electricity from wind power, the money spent for electricity stays
largely in the region. Developing wind resources thus promises to
help rural communities in many countries, providing a welcome supplemental
source of income and employment.
As the world energy economy is restructured, so, too, will the rest
of the economy change. The geography of economic activity will be
altered, in some cases dramatically. The traditional siting of heavy
industry, such as steel production, in areas where coal and iron
ore are found in close proximity will no longer be necessary. In
the future, energy-intensive industries will be located in wind-rich
regions rather than coal-rich regions. Countries that were once
importers of energy may become self-sufficient, even exporting electricity
or hydrogen.
One of the characteristics of the new energy economy is that it
will rely much more on decentralized small-scale power sources rather
than a few large, centralized systems. Small-scale energy systems
designed to satisfy the needs of individual homes, factories, or
office buildings will become much more common. Instead of a few
highly concentrated energy sources, the world will be turning to
vast numbers of small individual sources of energy. Fuel cells powered
with hydrogen and the highly efficient combined-cycle gas turbines
that are powered by either natural gas or hydrogen will become common.
Fuel cells can be used to generate electricity for office buildings,
factories, or individual homes or to power automobiles.
In the eco-economy, hydrogen will be the dominant fuel, replacing
oil, much like oil replaced coal and coal replaced wood. Since hydrogen
can be stored and used as needed, it provides perfect support for
an energy economy with wind and solar power as the main pillars.
If this pollution-free, carbon-free energy source can be developed
sooner rather than later, many of our present energy-related problems
can be solved. Electricity and hydrogen can together provide energy
in all the forms needed to operate a modern economy, whether powering
computers, fueling cars, or manufacturing steel.
On first reflection, such an energy system may seem a farfetched
idea. But two decades ago, the idea of desktop or laptop computers
and Internet communication seemed equally farfetched. As Seth Dunn
of Worldwatch Institute notes, what is most inconceivable is that
an information-age economy should be powered by a primitive, industrial-age
energy system. As corporate and government decisionmakers begin
to understand the need to restructure the energy economy, and just
how economical and practical a zero-emissions, carbon-free energy
system can be, then they may finally summon the sort of effort that
supported the last great energy transitionthe
one from wood to fossil fuels a century ago.64
If the goal is to expand wind electric generation fast enough to
accelerate the phaseout of coal, it would mean extraordinarily rapid
growth in wind energy. Is such growth possible? Yes. The growth
in the Internet provides a model. Between 1985 and 1995, the number
of host computers on the Internet more than doubled each year. In
1985, there were 2,300 host computers on the Internet. By 1995,
there were 14,352,000.65
A back-of-the-envelope calculation indicates what kind of growth
would be needed for wind to become the foundation of the global
energy economy, and how much it would cost. What would happen if
wind electric generation doubled each year for the next 10 years,
as adoption of the Internet did? Assume for the sake of calculation
that in 2000 the world had 20,000 megawatts of wind-generating electricity
online and that in 2001 this doubled to 40,000 megawatts, then in
2002 to 80,000 megawatts, and so forth. At this rate, by 2005, it
would be 640,000 megawattsnearly
enough to meet all U.S. electricity demand. By 2010, it would reach
20.4 million megawatts of wind generating capacity, far beyond today's
3.2 million megawatts of world generating capacity or the projection
of 4 million or so megawatts of capacity needed by 2010. This would
not only satisfy world electricity needs, it could meet other energy
needs as wellincluding
those for transportation and heavy industry as well as residential
uses.66
How much would this cost? Assuming generously that it would take
$1 million of investment per megawatt of electricity, 10 million
megawatts of wind power capacity would require an investment over
the next 10 years of $10 trillion. This would amount to roughly
$1 trillion a yearabout
double what the world spent for oil in 2000, or just 2.5 percent
of the gross world product of $40 trillion. Another financial reference
point, which is in some ways more relevant, is the $700 billion
that the world's governments have been spending each year on environmentally
destructive activities, such as coal mining, excess fishing capacity,
and overpumping of aquifers. (See Chapter 11.) Shifting these subsidies
into investment in wind development would accelerate the evolution
of an eco-economy on several fronts simultaneously. This calculation
simply illustrates that if the world wants to move quickly to eliminate
excessive carbon emissions, it can do so.67
The transition from a fossil-fuel- or carbon-based economy to a
high-efficiency, hydrogen-based economy will provide enormous investment
and employment opportunities across the globe. The question is not
whether there will be an energy revolution. It is already under
way. The only questions are how rapidly it will unfold, whether
it will move fast enough to prevent climate change from getting
out of hand, and who will benefit most from the transition.
Realistically, how fast could wind generation expand during this
decade? During the 1990s it expanded at 25 percent a year, with
only a half-dozen countries accounting for most of the growth. If
all countries with commercially viable wind sites began developing
their wind, how fast could it expand? Could it double each year?
That would be tough, requiring a mobilization akin to that during
World War II. There might be a few annual doublings early in the
decade while the base is still small, but then the rate of expansion
would slow. How fast the world develops wind resources will depend
in part on how fast climate changes and how alarmed we become by
record heat waves, rapid ice melting, and more destructive storms.
Although predicting the rate of future growth is not possible, it
is clearly safe to assume that the world could be getting much of
its electricity from wind by 2010 if it becomes important to do
so.68
In his Worldwatch Paper Hydrogen Futures, Seth Dunn quotes
President John F. Kennedy: "There are risks and costs to a program
of action. But they are far less than the long-range risks and costs
of comfortable inaction." Dunn then goes on to establish the parallel
between Kennedy's cold war observation and the current energy transition.
"There are risks and costs involved in rapidly building a hydrogen
economy, but they are far less than the long-range risks and costs
of remaining comfortably committed to the hydrocarbon economy."69
The key to accelerating the transition to a hydrogen economy is
to get the market to incorporate ecological costs in the prices.
The Economist argues that there is a need to level the playing field
and then let the market take it from there: "That means, for example,
dismantling the many subsidies that prop up coal and other fossil
fuels. It also means introducing a carbon tax or similar mechanism
to ensure that prices for fossil fuels reflect the harm they do
to human health and to the environment." More and more analysts
are reaching this same conclusion. A recent study by the Organisation
for Economic Co-operation and Development also argues for restructuring
taxes in order to reduce carbon emissions. Phasing in a carbon tax
so that the burning of fossil fuels would reflect their full cost
to society would accelerate the transition to wind energy, solar
cells, and geothermal energy, expanding them far faster during this
decade than during the last.70
Table 5-2. Trends in Energy Use, by Source,
1990-2000 |
Energy Source |
Annual
Rate of Growth
|
|
(percent)
|
Wind power |
25
|
Solar cells |
20
|
Geothermal power |
4
|
Hydroelectric power |
2
|
Natural Gas |
2
|
Oil |
1
|
Nuclear Power |
0.8
|
Coal |
-1
|
|
Source: Worldwatch Institute,
Vital Signs 2001 (New York: W.W. Norton & Company, 2001),
pp. 40-47. |
ENDNOTES:
58.
Dunn, op. cit. note 4; Flavin, op. cit. note 3; Flavin, op. cit.
note 42; Nicholas Lenssen, "Nuclear Power Inches Up," in Worldwatch
Institute, op. cit. note 3, pp. 42-43; and graphs compiled by Worldwatch
Institute, 2001.
59. Decline in coal use based on BP, BP Statistical Review of World
Energy (London: Group Media & Publications, June 2001), p. 33. According
to EIA, coal subsidies have been halved in China since 1984; EIA,
"China: Environmental Issues" (Washington, DC: DOE, April 2001),
p. 4.
60. Lenssen, op. cit. note 58.
61. Ibid.; France, China, and Japan news from Nicholas Lenssen,
"Nuclear Power Rises Slightly," in Brown et al., op. cit. note 42,
p. 54.
62. Price history of wind from AWEA, www.awea.org; Flavin, op. cit.
note 3; Lenssen, op. cit. note 58.
63. Ford cited in David Bjerklie et al., "Look Who's Trying to Turn
Green," Time, 9 November 1998.
64. Seth Dunn, Micropower: The Next Electrical Era, Worldwatch Paper
151 (Washington, DC: Worldwatch Institute, July 2000).
65. Payal Sampat, "Internet Use Accelerates," in Brown et al., op.
cit. note 42, p. 95.
66. World wind electric generation in 1998 and 2000 from Flavin,
op. cit. note 3; U.S. example based on 1999 U.S. electricity consumption
of 3 trillion kilowatt-hours, from DOE, op. cit. note 26, and output
from projected wind capacity of 2.2 trillion kWh, taking into account
a 40-percent capacity factor.
67. Gross world product of $40 trillion from International Monetary
Fund, World Economic Outlook (Washington, DC: October 2000); David
Malin Roodman, Paying the Piper: Subsidies, Politics, and the Environment,
Worldwatch Paper 133 (Washington, DC: Worldwatch Institute, December
1996), p. 6.
68. Expansion during last decade from Flavin, op. cit. note 3.
69. Seth Dunn, Hydrogen Futures: Toward a Sustainable Energy System,
Worldwatch Paper 157 (Washington, DC: Worldwatch Institute, August
2001), p. 75.
70. "Beyond Carbon," The Economist, 10 February 2001, p. 24; Organisation
for Economic Co-operation and Development, OECD Environmental Outlook
(Paris: 2001), p. 163.
Copyright
© 2001 Earth Policy Institute
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